An employee counts Indian currency notes at a cash counter inside a bank in Kolkata.

The Indian rupee fell to a record low on Thursday morning, following a declining trend all year — which economists attributed to rising oil prices, broader emerging market concerns, and strong month-end dollar demand.

It slid to 70.8100 against the dollar, after a previous new low just a day before at 70.475. That marked a 10.97 percent decline since the start of the year.

"Weakening has accompanied rising investment concerns about emerging markets more broadly, as well as a widening current account deficit, itself largely the result of higher oil prices," Deutsche Bank Wealth Management's Tuan Huynh, Chief Investment Officer (Asia Pacific), wrote in a report on Thursday.

More expensive oil leads to a higher import bill for India, a net importer of oil. Higher oil prices also lead to a widening current account deficit — a measure of the flow of goods, services and investments in and out of the country.

Oil prices have been up more than 7 percent since mid-August, DBS Economist Radhika Rao explained in a note following the previous record low on Wednesday. Along with that, end-month dollar demand has also added to the pace of currency sell-off, she said.

"Markets get a sense that the authorities are tolerant of a weaker rupee, with little by way of jawboning or verbal intervention," Rao added.

That's despite the sell-off in emerging markets — caused by the lira crisis in Turkey — which has also put pressure on the rupee. For now, Rao explained, India could be choosing to "preserve their bullets" in the event of further developments, which could cause further weakness and require central bank intervention.

"With the US Fed expected to gradually tighten policy rates in (the) rest of 2018 and in 2019, lingering trade war fears and jump in dollar demand domestically … volatility is here to stay," she said.

The Deutsche Bank Wealth Management report predicts that the rupee will depreciate further to 74 against the dollar by June 2019.

"Aside from higher current account deficits, USD strength (and higher U.S. Treasury yields) and the likely widening in the government's fiscal deficit in this pre-election year could continue to weigh on the currency," it said.